Exclusive: Meta cuts employment plans, gears for “hard” headwinds

June 30 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has cut plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees on Thursday, warning them to prepare for a deep economic downturn. .

“If I had to bet, I would say this could be one of the worst downturns we̵[ads1]7;ve seen in recent history,” Zuckerberg told workers in a weekly question and answer session for employees, which was heard by Reuters.

Meta has reduced the target for hiring engineers by 2022 to around 6,000-7,000, down from an original plan to hire around 10,000 new engineers, Zuckerberg said.

Meta roughly confirmed layoffs last month, but exact figures have not been previously reported.

In addition to reducing hiring, he said, the company left certain positions vacant in response to wear and tear and “turn up the heat” on performance management to weed out employees who were unable to achieve more aggressive goals.

“Realistically, there are probably a bunch of people in the company who should not be here,” Zuckerberg said.

“Part of my hope in raising expectations and having more aggressive goals, and just turning up the heat a little, is that I think some of you may decide that this place is not for you, and that self-choice is OK with me,” he said. he.

The social media and technology company is preparing for a slimmer second half year, as it copes with macroeconomic pressure and hits on the privacy of the advertising business, according to an internal note seen by Reuters on Thursday.

The company must “prioritize more ruthlessly” and “operate slimmer, slimmer, better performing teams”, Chief Product Officer Chris Cox wrote in the note, which appeared on the company’s internal discussion forum Workplace before questions and answers.

“I must emphasize that we are in serious times here and the headwind is strong. We must perform flawlessly in an environment of slower growth, where teams should not expect large influxes of new engineers and budgets,” Cox wrote.

The memo was “intended to build on what we have already said publicly in revenue about the challenges we face and the opportunities we have, where we spend more of our energy on addressing,” a Meta spokesman said in a statement.

The guide is the latest rough forecast coming from Meta executives, who have already moved to cut costs across large parts of the company this year in the face of slowed advertising sales and user growth. read more

Technology companies across the board have scaled down their ambitions in anticipation of a possible recession in the US, although the fall in the share price of Meta has been more severe than that of competitors Apple (AAPL.O) and Google (GOOGL.O).

The world’s largest social media company lost about half of its market value this year, after Meta reported that daily active users on the flagship Facebook app had experienced a quarterly decline for the first time. read more

Its tightening operation comes at a difficult time, coinciding with two major strategic upheavals: one aims to transform social media products around “discovery” to beat back competition from the short video app TikTok, the other an expensive long-term effort on augmented and virtual reality -technology.

In his memo, Cox said Meta would need to quadruple the number of graphics processing units (GPUs) in its data centers by the end of the year to support “discovery” push, which requires extra computing power for artificial intelligence to become popular. posts from all over Facebook and Instagram in users’ feeds.

Interest in Meta’s TikTok-style short video product Reels grew rapidly, Cox said, with users doubling the time they spent on Reels year after year, both in the United States and globally.

About 80% of the growth since March came from Facebook, he added.

That user engagement with Reels can provide a key route to strengthening the bottom line, which makes it important to increase ads in Reels “as quickly as possible”, he added.

CEO Mark Zuckerberg told investors in April that executives saw Reels as “an important part of the vision for the discovery engine”, but at the time described the short video shift as a “short-term headwind” that would gradually increase revenue as advertisers became more comfortable with the format .

Cox said that Meta also saw opportunities for revenue growth in business messaging and shopping tools in the app, of which the latter, he added, could “curb signal loss” created by Apple-led privacy changes.

He said the company’s hardware division was “laser focused” on succeeding in launching the mixed reality headset, codenamed “Cambria”, in the second half of the year.

Reporting by Katie Paul; Edited by Kenneth Li, Peter Henderson and Lisa Shumaker

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